Millions of American families are struggling to find a home they can afford. In 2025, home prices rose more than 50 percent since 2020, with median sales prices topping $423,000, while rents increased nearly 30 percent. Nearly 43 million households—half of all renters and a quarter of homeowners—spend more than 30 percent of their income on housing, leaving little for essentials like food, child care, and health care. Even outside big cities, families in suburban and rural communities face steep costs that threaten economic stability and mobility.
The high cost of housing is drawing strong bipartisan attention in Washington, DC—and for good reason. The gap between housing supply and demand has grown steadily since the Great Recession, as the nation has “underbuilt” millions of homes. Restrictive local zoning and land use policies limit the types of homes that can be built and prevent greater housing density. Regulatory policies also increase construction costs: the National Association of Home Builders estimates that compliance adds 25 percent to a new single-family home and more than 40 percent to a multifamily property. Elevated mortgage rates have further reduced available inventory, as homeowners with lower rates stay put, locking in supply.
Cities and states are responding. Many are reforming restrictive rules on lot sizes, parking, and single-family zoning. Others are easing restrictions on accessory dwelling units, manufactured homes, and modular housing, while streamlining permitting processes to speed construction. For example, Portland’s reforms allowing duplexes, triplexes, and small accessory dwelling units and Houston’s reduction of minimum lot sizes have led to measurable increases in housing supply and slowed rent growth relative to surrounding areas, demonstrating that local reforms can produce real results. These reforms must continue and spread to other communities to close the supply gap and make housing more affordable.
While cities and states are on the front lines in tackling America’s housing affordability challenge, the federal government also has a critical role.
While cities and states are on the front lines in tackling America’s housing affordability challenge, the federal government also has a critical role. As a “supply-side” measure, the federal Low-Income Housing Tax Credit (LIHTC) has incentivized billions in private investment and helped finance 4 million rental homes that otherwise likely wouldn’t exist. The recent One Big Beautiful Bill Act expanded LIHTC, which experts say will finance more than 1.2 million new affordable rental homes over the next decade. On the “demand-side,” the Housing Choice Voucher (HCV) program helps some 2.3 million families afford housing in the private rental market by closing the gap between rent and household income.
Federal legislation can also encourage local reform. The bipartisan ROAD to Housing Act, recently passed by the U.S. Senate, would reward states and communities that adopt pro-housing policies. It would direct HUD to publish best-practice guidelines for zoning, create an Innovation Fund to reward communities adopting reforms like “as of right” approvals for missing middle housing, and link access to federal transportation and Community Development Block Grant funds to local housing actions. The bill also addresses federal rules that complicate housing construction—for example, by removing the permanent chassis requirement for manufactured homes and streamlining unnecessary environmental reviews for new housing construction in developed areas. The bill also would encourage greater landlord participation in the HCV program by streamlining the cumbersome inspection process.
An effective response to the problem of high housing costs requires an “all-hands-on-deck” approach, involving all levels of government as well as the private sector and philanthropy.
The U.S. House of Representatives is considering many similar reforms. The House Financial Services Committee recently endorsed the bipartisan Housing for the 21st Century Act by an overwhelming vote of 50 to 1. Like ROAD to Housing, this comprehensive legislation aims to improve housing affordability by streamlining regulatory requirements, modernizing existing housing programs, and expanding affordable housing finance options.
An effective response to the problem of high housing costs requires an “all-hands-on-deck” approach, involving all levels of government as well as the private sector and philanthropy. A sustained focus on improving affordability is essential because few aspects of our life are more important than housing. Families who can afford safe, stable homes are better able to invest in education, pursue job opportunities, and plan for the future. Access to an adequate supply of affordable homes is essential for employers seeking to attract and retain workers and for communities to grow sustainably.
Improving housing affordability is both a practical and economic imperative. By combining local reforms with targeted federal incentives, Washington can help ensure that every American has access to a home that supports their family, career, and economic future.
Dennis Shea chairs the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center.